<PAGE>
CENTRAL OHIO COAL COMPANY
Page
CONTENTS
Statements of Income and Statements of Retained Earnings . . . 1
Statements of Cash Flows . . . . . . . . . . 2
Balance Sheets . . . . . . . . . . . . 3-4
Notes to Financial Statements . . . . . . . . . 5-12
<PAGE>
<PAGE>
<TABLE>
CENTRAL OHIO COAL COMPANY
STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Year Ended December 31,
1998 1997 1996
(in thousands)
<S> <C> <C> <C>
OPERATING REVENUES . . . . . . . . . . . $110,219 $ 66,279 $ 65,478
OPERATING EXPENSES (including
depreciation, depletion and
amortization of mining plant of
$3,356,000 in 1998, $3,771,000 in
1997 and $4,890,000 in 1996) . . . . . 113,845 70,546 64,932
OPERATING INCOME (LOSS). . . . . . . . . (3,626) (4,267) 546
NONOPERATING INCOME. . . . . . . . . . . 2,843 3,879 2,699
INCOME (LOSS) BEFORE INTEREST CHARGES. . (783) (388) 3,245
INTEREST CHARGES (including $38,000
in 1996 on long-term debt to
Parent Company). . . . . . . . . . . . 24 - 53
INCOME (LOSS) BEFORE FEDERAL
INCOME TAXES. . . . . . . . . . . . . . (807) (388) 3,192
FEDERAL INCOME TAX EXPENSE (CREDIT). . . (808) (388) 1,389
NET INCOME . . . . . . . . . . . . . . . $ 1 $ - $ 1,803
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF RETAINED EARNINGS
(UNAUDITED)
<CAPTION>
Year Ended December 31,
1998 1997 1996
(in thousands)
<S> <C> <C> <C>
RETAINED EARNINGS JANUARY 1. . . . . . . $- $200 $ -
NET INCOME . . . . . . . . . . . . . . . 1 - 1,803
CASH DIVIDENDS DECLARED. . . . . . . . . - 200 1,603
RETAINED EARNINGS DECEMBER 31. . . . . . $1 $ - $ 200
See Notes to Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
CENTRAL OHIO COAL COMPANY
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Year Ended December 31,
1998 1997 1996
(in thousands)
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . . . $ 1 $ - $ 1,803
Adjustments for Noncash Items:
Depreciation, Depletion and
Amortization . . . . . . . . . . . 3,356 3,771 4,890
Deferred Federal Income Taxes. . . . (20,989) (2,952) (3,536)
Changes in Capital Lease Obligations (7,904) (2,022) (2,418)
Reclamation Reserve. . . . . . . . . 8,524 9,177 12,393
Provision for Future Rent Payments . 8,927 (4,192) 4,738
Provision for Mine Closure Costs . . 44,632 - -
Accrued Postretirement Benefits
Other Than Pensions. . . . . . . . 26,314 2,269 2,273
Changes in Certain Current Assets
and Liabilities:
Accounts Receivable. . . . . . . . . 5,342 (5,780) (1,821)
Coal, Materials and Supplies . . . . 225 1,559 880
Accounts Payable . . . . . . . . . . (83) 612 1,024
Taxes Accrued. . . . . . . . . . . . 3,246 (596) 596
Payment of Disputed Tax and
Interest Related to COLI . . . . . . (10,211) - -
Other (net). . . . . . . . . . . . . . (14,497) 5,366 (1,573)
Net Cash Flows From Operating
Activities. . . . . . . . . . . 46,883 7,212 19,249
INVESTING ACTIVITIES:
Cash Used for Construction
Expenditures. . . . . . . . . . . . . (9,078) (1,072) (280)
Proceeds from Sales of Property. . . . 623 1 1
Net Cash Flows Used For
Investing Activities. . . . . . (8,455) (1,071) (279)
FINANCING ACTIVITIES:
Retirement of Long-term Debt . . . . . (286) (104) (1,604)
Return of Capital Contributions
to Parent Company . . . . . . . . . . - - (19,962)
Dividends Paid . . . . . . . . . . . . - (200) (1,603)
Net Cash Flows Used For
Financing Activities. . . . . . (286) (304) (23,169)
Net Increase (Decrease) in Cash and
Cash Equivalents. . . . . . . . . . . . 38,142 5,837 (4,199)
Cash and Cash Equivalents January 1. . . 14,335 8,498 12,697
Cash and Cash Equivalents December 31. . $52,477 $ 14,335 $ 8,498
See Notes to Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
CENTRAL OHIO COAL COMPANY
BALANCE SHEETS
(UNAUDITED)
<CAPTION>
December 31,
1998 1997
(in thousands)
<S> <C> <C>
ASSETS
MINING PLANT:
Surface Lands . . . . . . . . . . . . . . . . . $ 324 $ 324
Mining Structures and Equipment . . . . . . . . 38,048 58,576
Coal Interests (net of depletion) . . . . . . . 1,378 3,112
Other . . . . . . . . . . . . . . . . . . . . . 2,292 2,292
Total Mining Plant. . . . . . . . . . . 42,042 64,304
Accumulated Depreciation and Amortization . . . 36,584 50,673
NET MINING PLANT. . . . . . . . . . . . 5,458 13,631
OTHER PROPERTY AND INVESTMENT:
Payment of Disputed Tax and Interest
Related to COLI. . . . . . . . . . . . . . . . 10,211 -
Other . . . . . . . . . . . . . . . . . . . . . 1,456 1,059
OTHER PROPERTY AND INVESTMENTS . . . . 11,667 1,059
CURRENT ASSETS:
Cash and Cash Equivalents . . . . . . . . . . . 52,477 14,335
Accounts Receivable:
General . . . . . . . . . . . . . . . . . . . 277 1,724
Affiliated Companies. . . . . . . . . . . . . 4,118 8,013
Coal - at average cost. . . . . . . . . . . . . 140 28
Materials and Supplies - at average cost. . . . 6,667 7,004
Other . . . . . . . . . . . . . . . . . . . . . 148 448
TOTAL CURRENT ASSETS. . . . . . . . . . 63,827 31,552
DEFERRED INCOME TAXES . . . . . . . . . . . . . . 45,394 24,186
REGULATORY ASSETS . . . . . . . . . . . . . . . . 142 474
DEFERRED CHARGES. . . . . . . . . . . . . . . . . 998 299
TOTAL . . . . . . . . . . . . . . . . $127,486 $71,201
See Notes to Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
CENTRAL OHIO COAL COMPANY
BALANCE SHEETS
(UNAUDITED)
<CAPTION>
December 31,
1998 1997
(in thousands)
<S> <C> <C>
CAPITALIZATION AND LIABILITIES
SHAREHOLDER'S EQUITY:
Common Stock - Par Value $0.10:
Authorized - 100,000 Shares
Outstanding - 69,000 Shares . . . . . . . . . . $ 7 $ 7
Retained Earnings . . . . . . . . . . . . . . . . 1 -
TOTAL SHAREHOLDER'S EQUITY. . . . . . . . 8 7
LONG-TERM DEBT - Finance Obligation . . . . . . . . - 182
OTHER NONCURRENT LIABILITIES:
Obligations Under Capital Leases. . . . . . . . . - 5,124
Accrued Postretirement Benefits Other
Than Pensions. . . . . . . . . . . . . . . . . . 40,855 14,541
Accrued Reclamation Costs . . . . . . . . . . . . 35,741 27,217
Mine Closure. . . . . . . . . . . . . . . . . . . 27,652 3,545
Other . . . . . . . . . . . . . . . . . . . . . . 9,435 1,729
TOTAL OTHER NONCURRENT LIABILITIES. . . . 113,683 52,156
CURRENT LIABILITIES:
Long-term Debt Due Within One Year. . . . . . . . - 104
Accounts Payable:
General . . . . . . . . . . . . . . . . . . . . 2,367 1,842
Affiliated Companies. . . . . . . . . . . . . . 409 1,017
Taxes Accrued . . . . . . . . . . . . . . . . . . 3,246 -
Accrued Reclamation Costs . . . . . . . . . . . . 4,681 5,230
Accrued Vacation Pay. . . . . . . . . . . . . . . 607 778
Workers' Compensation Claims. . . . . . . . . . . 619 855
Obligations Under Capital Leases. . . . . . . . . - 2,780
Other . . . . . . . . . . . . . . . . . . . . . . 549 3,353
TOTAL CURRENT LIABILITIES . . . . . . . . 12,478 15,959
DEFERRED GAIN ON SALE AND LEASEBACK OF PLANT. . . . 1,317 2,896
DEFERRED CREDITS. . . . . . . . . . . . . . . . . . - 1
CONTINGENCIES (Note 2)
TOTAL . . . . . . . . . . . . . . . . . . $127,486 $71,201
See Notes to Financial Statements.
</TABLE>
<PAGE>
<PAGE>
CENTRAL OHIO COAL COMPANY
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Discontinued Mining Operations
Central Ohio Coal Company (the Company or COCCo), is a wholly-owned
subsidiary of Ohio Power Company (OPCo), which is a subsidiary of American
Electric Power Company, Inc. (AEP Co., Inc.), a public utility holding
company. The Company conducts surface mining operations in southeastern
Ohio to supply coal to OPCo's Muskingum River Plant. The Clean Air Act
Amendments of 1990 (CAAA) require significant reductions in sulfur dioxide
and nitrogen oxides emitted from OPCo's generating plants. Muskingum
River Plant Unit 5 has been switched to low sulfur coal, as part of the
AEP System's least-cost compliance plan. The plan also includes fuel
switching to lower sulfur coal at other AEP System generating units,
including Muskingum River Plant Units 1 through 4, to comply with Phase II
of the CAAA in the year 2000. As a result in October 1998 the Company
announced plans to discontinue mining operations effective October 31,
1999. Consequently, a provision of $44.6 million for mine closure costs
was recorded in October 1998. An additional provision of $6.3 million for
other postretirement benefits was recorded in February 1999. The Company
billed and recovered these costs from OPCo.
Until mining operations cease in October 1999 coal will be sold to OPCo at
prices regulated by the Securities and Exchange Commission (SEC) under the
Public Utility Holding Company Act of 1935 (1935 Act). Prices billed in
connection with coal sales are sufficient to recover expenses and provide
for a return on OPCo's equity investment excluding retained earnings. The
Company is also authorized to sell coal to unaffiliated companies with the
net proceeds used to reduce the price of coal that is sold to OPCo.
Basis of Accounting
As a cost-based rate-regulated entity, COCCo's financial statements
reflect the actions of regulators that result in the recognition of
revenues and expenses in different time periods than enterprises that are
not rate regulated. In accordance with Statement of Financial Accounting
Standards (SFAS) No. 71 "Accounting for the Effects of Certain Types of
Regulation," regulatory assets (deferred expenses) and regulatory
liabilities (deferred income) are recorded to reflect the economic effects
of regulation. Such deferrals are amortized commensurate with their
inclusion in billings to OPCo.
Use of Estimates
The preparation of these financial statements in conformity with generally
accepted accounting principles requires in certain instances the use of
management's estimates. Actual results could differ from those estimates.
<PAGE>
Coal Supply Agreement
Pursuant to a coal supply agreement with OPCo, the Company is obligated to
deliver substantially all coal it mines to OPCo and entitled to receive
payment for all costs incurred, even under circumstances in which such
coal is not mined and/or delivered due to a natural disaster, labor unrest
or any other forced or voluntary cessation or curtailment of mining,
either temporary or permanent.
Mining Plant and Depreciation, Depletion and Amortization
Mining plant is stated at cost and includes expenditures for mine
development. Mine development includes all costs to develop the mines in
excess of amounts realized from coal produced during the mine development
period. As a subsidiary of a regulated public utility, an allowance for
funds used during construction (AFUDC) is recorded as a noncash income
item that is recovered over the service life of mining plant through
depreciation and represents a reasonable return on funds used to finance
construction projects. The amounts of AFUDC for 1998, 1997 and 1996 were
not significant.
Depreciation, depletion and amortization are provided over the estimated
useful asset lives and are calculated using the straight-line method for
mining structures and equipment and the units-of-production method for
coal rights and mine development costs.
Costs of ordinary maintenance, repairs, renewals and minor replacements of
property are expensed while major additions of property, replacements of
property and betterments are capitalized. Mining plant and related
accumulated provisions for depreciation and amortization are relieved upon
disposition of the related property with any gain or loss recorded as
income or expense in the period of disposition. Such gains and losses are
included in costs billed to OPCo under the coal supply agreement.
Cash and Cash Equivalents
Cash and cash equivalents include temporary cash investments with original
maturities of three months or less.
Income Taxes
The Company follows the liability method of accounting for income taxes as
prescribed by SFAS 109, "Accounting for Income Taxes." Under the
liability method, deferred income taxes are provided for all temporary
differences between book cost and tax basis of assets and liabilities
which will result in a future tax consequence. Where the flow-through
method of accounting for temporary differences is reflected in the
Company's coal billings and OPCo's fuel rates, deferred income taxes are
recorded with related regulatory assets and liabilities in accordance with
SFAS 71.
<PAGE>
Black Lung Benefits and Workers' Compensation
The Company is liable under the Federal Coal Mine Health and Safety Act of
1969 (Act), as amended, to pay certain black lung benefits to eligible
present and former employees. An irrevocable Black Lung Benefits Trust is
maintained under the Internal Revenue Code which, based on the most recent
actuarial study, is fully funded. No accruals for Black Lung liabilities
were made in 1998, 1997 or 1996.
The Company is self-insured for workers' compensation. The estimated
present value of workers' compensation claims is provided for based on
known events and claims.
Reclamation
Accruals are made for estimated costs of direct reclamation as a result of
the surface mining of coal. The accrual is for the estimated amount
necessary to restore the land and water resources affected by the mining
operations to their post mining land uses, as approved by the Ohio
Department of Natural Resources.
The Surface Mining and Reclamation Act of 1977 established minimum
standards for the final closure of mines after their coal reserves are
exhausted. This would include reclaiming the support acreage at surface
mines and the removal or covering of refuse piles and water settling
ponds. Reclamation costs associated with support operations at the
Company's surface mines are recorded and billed to OPCo in accordance with
the coal supply agreement.
Big Muskie
In January 1999 the Company announced that it awarded a contract for the
dismantling and disposal of its Big Muskie dragline. The salvage value of
Big Muskie is expected to cover the cost of dismantling and disposal.
2. CONTINGENCIES
Litigation
The Internal Revenue Service (IRS) agents auditing the AEP System's
consolidated federal income tax returns for the years 1991 to 1993
requested a ruling from their National Office that certain interest
deductions claimed by the Company relating to AEP's corporate owned life
insurance (COLI) program should not be allowed. As a result of a suit
filed by the Company in US District Court (discussed below) this request
for ruling was withdrawn by the IRS agents. Adjustments have been or will
be proposed by the IRS disallowing COLI interest deductions for taxable
years 1991-96.
In 1998 the Company made payments of taxes and interest attributable to
COLI interest deductions for taxable years 1991-97 to avoid the potential
assessment by the IRS of any additional above market rate interest on the
contested amount. The payments to the IRS are included on the balance
sheet in other property and investments pending the resolution of this
matter. The Company will seek refund, either administratively or through
litigation, of all amounts paid plus interest. In order to resolve this
issue without further delay, on March 24, 1998, the Company filed suit
against the US in the US District Court for the Southern District of Ohio.
Management believes that it has a meritorious position and will vigorously
pursue this lawsuit. A disallowance of the COLI interest deductions
through December 31, 1998 would total approximately $10.8 million
(including interest). In the event the resolution of this matter is
unfavorable, the Company expects to recover from OPCo all of its costs
under the terms of the coal supply agreement.
The Company is involved in a number of other legal proceedings and claims.
While management is unable to predict the ultimate outcome of litigation,
it is not expected that the resolution of these matters will have a
material adverse effect on the results of operations, cash flows or
financial condition.
The Company recovers all costs from OPCo under the coal supply agreement.
3. OTHER RELATED-PARTY TRANSACTIONS
American Electric Power Service Corporation (AEPSC) provides certain
managerial and professional services to AEP System companies including
COCCo. The costs of the services are billed by AEPSC on a direct-charge
basis to the extent practicable and on reasonable bases of proration for
indirect costs. The charges for services are made at cost and include no
compensation for the use of equity capital, which is furnished to AEPSC by
AEP Co., Inc. Billings from AEPSC are capitalized or expensed depending
on the nature of the services rendered. AEPSC and its billings are
subject to the regulations of the SEC under the 1935 Act.
4. BENEFIT PLANS
The Company participates in the United Mine Workers of America (UMWA)
pension plan, a defined contribution plan which covers its UMWA employees.
Contributions totaled $189,000 in 1998, $278,000 in 1997 and $247,000 in
1996. As of June 30, 1998, the UMWA actuary estimates that the Company's
share of the UMWA pension plans unfunded vested liabilities was
approximately $5.2 million. A withdrawal obligation may be triggered for
all or a portion of the Company's share of the unfunded vested liability
when mining operations cease.
The Company participates in the AEP System qualified pension plan, a
defined benefit plan which covers all employees, except participants in
the UMWA pension plans. Net pension costs (credits) for the years ended
December 31, 1998 and 1996 were $(39,000) and $46,000, respectively.
There was no pension cost for the AEP System plan in 1997.
A defined contribution employee savings plan offered to non-UMWA employees
required that the Company make contributions to the plan totaling $87,000
in 1998, $84,000 in 1997 and $82,000 in 1996.
Postretirement medical benefits for the Company's UMWA employees who have
retired or will retire after January 1, 1976 (post 1975 UMWA retirees) are
the liability of the Company. The AEP System provides certain other
benefits for retired employees under an AEP System plan. The annual
accrued costs for these plans were $28.5 million in 1998, $4.4 million in
1997 and 1996. The accrued cost in 1998 includes $24.1 million in
curtailment charges recognized in anticipation of the October 31, 1999
shutdown of the Muskingum Mine by the Company.
<PAGE>
Several UMWA health plans pay
the postretirement medical benefits for the Company's UMWA retirees who
retired before January 2, 1976 and their survivors plus retirees and
others whose last employer is no longer a signatory to the UMWA contract
or is no longer in business. Required annual payments to these plans
totaled $143,000 in 1998, $94,000 in 1997 and $95,000 in 1996.
The Energy Policy Act of 1992 (Energy Act) permits recovery of excess
Black Lung Trust funds of the AEP System to pay certain postretirement
medical benefits under one of the UMWA health plans. Reimbursement
limitations apply to the System's excess funding. The Company has a fund
surplus that it is able to transfer to other AEP System companies that are
members of the fund and have a deficit. In June 1998 management decided
to cease reimbursing retiree medical costs due to the reduced levels of
available Black Lung surplus and proposed new rules that could liberalize
the current claims process. The amounts of Black Lung surplus utilized in
accordance with the Energy Act to reimburse the Company for benefits paid
were $0.7 million in 1998, $1.1 million in 1997 and $1.5 million in 1996.
In 1998 $385,000, in 1997 $514,000 and in 1996 $81,000 of Black Lung
surplus was utilized to reallocate from the Company's surplus Black Lung
trust fund to other System member companies. The Company's share of the
Black Lung Trust funds surplus at December 31, 1998, 1997 and 1996 was
$1.6 million, $1.1 million and $3.4 million, respectively.
5. FEDERAL INCOME TAXES
The details of Federal income taxes are as follows:
Year Ended December 31,
1998 1997 1996
(in thousands)
Current (net) . . . . . . . . . . . . . . . $ 20,181 $ 2,564 $ 4,925
Deferred (net). . . . . . . . . . . . . . . (20,989) (2,952) (3,536)
Total Federal Income Taxes. . . . . . . . . $ (808) $ (388) $ 1,389
Federal income taxes as reported are different from pre-tax book income
multiplied by the statutory tax rate predominantly due to permanent
differences for corporate owned life insurance and the practice of flow-through
accounting for book/tax differences associated with certain
depreciation differences.
The Company joins in the filing of a consolidated federal income tax
return with its affiliated companies in the AEP System. The allocation of
the AEP System's current consolidated federal income tax to the System
companies is in accordance with SEC rules under the 1935 Act. These rules
permit the allocation of the benefit of current tax losses to the System
companies giving rise to them in determining their current tax expense.
The tax loss of the System parent company, AEP Co., Inc., is allocated to
its subsidiaries with taxable income. With the exception of the loss of
the parent company, the method of allocation approximates a separate
return result for each company in the consolidated group.
<PAGE>
The Company has settled with the IRS all issues from the audits of the
consolidated federal income tax returns for the years prior to 1991.
Returns for the years 1991 through 1996 are presently being audited by
the IRS. With the exception of the deductibility of interest deductions
related to AEP's corporate owned life insurance program, which are
discussed under the heading, Litigation, in Note 2, management is not
aware of any issues from open tax years that upon final resolution are
expected to have a material adverse effect on results of operations.
The following tables show the elements of the net deferred tax asset and
the significant temporary differences giving rise to such deferrals:
December 31,
1998 1997
(in thousands)
Deferred Tax Assets . . . . . . . . . . . . . . $44,676 $22,627
Deferred Tax Liabilities. . . . . . . . . . . . 718 1,559
Net Deferred Tax Assets . . . . . . . . . . . $45,394 $24,186
Property Related Temporary Differences. . . . . $ 3,309 $ 3,097
Amounts Due From Parent Company
For Future Federal Income Taxes . . . . . . . 29 (101)
Accrued Mine Reclamation Expense. . . . . . . . 14,834 11,396
Provision for Shutdown Costs. . . . . . . . . . 15,621 -
Deferred State Income Taxes . . . . . . . . . . 126 277
Deferred Book Gain - Sale/Leaseback of Plant. . 461 1,014
Accrued Postretirement Expense. . . . . . . . . 5,933 5,137
Accrued Leased Asset Book Rent Expense. . . . . 4,366 1,241
All Other (net) . . . . . . . . . . . . . . . . 715 2,125
Total Net Deferred Tax Assets . . . . . . $45,394 $24,186
6. SUPPLEMENTARY CASH FLOW INFORMATION
Year Ended December 31,
1998 1997 1996
(in thousands)
Cash was paid for:
Interest. . . . . . . . . . . . . . . . $ 24 $ - $ 53
Income Taxes. . . . . . . . . . . . . . 16,605 3,818 4,352
Noncash acquisitions under capital
leases . . . . . . . . . . . . . . . . - 256 527
7. RETURN OF CAPITAL
In September 1996, the Company was granted permission by the SEC to return
to its parent $19,962,000 out of capital surplus through December 31,
1998. In October 1996 the Company returned $19,962,000 to its parent out
of capital surplus.
<PAGE>
8. LONG-TERM DEBT
Long-term debt was outstanding as follows:
December 31,
1998 1997
(in thousands)
Finance Obligation . . . . . . . . . . . . . . . $ - $286
Less Portion Due Within One Year . . . . . . . . - 104
Total. . . . . . . . . . . . . . . . . . . . $ - $182
A finance obligation was entered into for the Mid Rail Loadout facility in
1994 through a sale and leaseback transaction. The term of the obligation
is six years, with a bargain purchase option at the expiration of the
agreement. In accordance with SFAS 98, the transaction did not qualify as
a sale and leaseback for accounting purposes. In 1998 the Company
redeemed this finance obligation.
9. LEASES
Property, plant and equipment are leased and require payments of related
property taxes, maintenance and operating costs. Lease rentals for both
operating and capital leases are generally charged to operating expenses.
The components of rental cost are as follows:
Year Ended December 31,
1998 1997 1996
(in thousands)
Operating Leases. . . . . . . . . . . . . $3,980 $4,068 $4,265
Amortization of Capital Leases. . . . . . 4,035 2,919 3,443
Interest on Capital Leases. . . . . . . . 289 579 606
Total Rental Costs. . . . . . . . . . $8,304 $7,566 $8,314
In conjunction with the announcement of closing the Muskingum Mine the
Company terminated all capital lease obligations in January 1998.
Properties under capital leases and related obligations recorded on the
balance sheets at December 31, 1997 are as follows:
(in thousands)
Mining Plant Under Capital Leases . . . . . . $23,278
Accumulated Provision for Amortization. . . . 15,374
Net Property under Capital Leases . . . . . . $ 7,904
Capital Lease Obligations:
Noncurrent Liability. . . . . . . . . . . . $ 5,124
Liability Due Within One Year . . . . . . . 2,780
Total Capital Lease Obligations . . . . . $ 7,904
<PAGE>
Properties under operating leases and related obligations are not included
in the balance sheets. Future minimum lease rentals are $3,666,000 each
year for 1999 through 2003 and $1,528,000 in later years.
